Iran on Tuesday rejected US charges that it supports terrorism and said that Washington, as a key backer of Israel, had no right to criticize Tehran's policies, reported the official Iranian news agency (IRNA).

"The US government, which itself is one of the supporters of Israeli state terrorism, is not in any position to judge others and should abandon its unconditional support for the Zionist regime," said foreign ministry spokesman Hamid-Reza Asefi, cited by the agency.

A US State Department report released Monday named Iran as a major sponsor of state terrorism in the year 2000.

Asefi dismissed the report as "baseless and repetitive" and said it "lacks credibility and acceptance as far as the international community and Iran are concerned."

Washington pointed to Iranian support for militant groups such as Hizbollah and Hamas.

Top officials from both groups were in Tehran late last month for an international conference in support of the Palestinian Intifada against the Jewish state.

Asefi said Iran's policy "stems from its sense of justice, because the only lasting peace in the region has to be based on incorporating the legitimate interest of the Palestinians."

Other countries in the region were harboring terrorism, and others were being watched, according to the US document.

The US has been critical of the human rights situation in the Islamic Republic since the two countries severed relations in 1979.

The United States accuses Iran of sponsoring terrorism, seeking to sabotage Arab-Israeli peace efforts, and committing human rights abuses.

Iran has made talks with the US conditional on an end to the sanctions and the unfreezing of some 10 billion dollars of its assets held in US banks since November 1980.

Last month, US President George W. Bush said he had no intention of easing sanctions on Iran despite his interest in reviewing the effectiveness of all US economic sanctions.

The United States currently bans its oil companies from investing in Iran.

Former president Bill Clinton last year lifted controls on some non-oil Iranian exports -- caviar, pistachio nuts and rugs – Albawaba.com